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Cohabitation and the law III
Statute law
•Sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996. (TLATA).
Prior to the passing of TLATA, I acted for a lady who cohabited with the father of her three children for 15 years and assumed his name. When the relationship broke down and her former partner asked her to leave the home which was registered in his sole name, Mrs A made an application pursuant to s30 of the Law of Property Act 1925.
The judge in the High Court referred to the comments by Waite J, as he then was, in the case Hammond v Mitchell 1991. At p 11 29D WaiteJ said:
'Had they been married, the issue of ownership would scarcely have been relevant, because the law ... when dealing with the financial consequences of divorce adopts a forward-looking perspective in which questions of ownership yield to the higher demands of relating the means of both to the needc of each the firct concideration given to the welfare of children.
Since this couple did not marry none of that flexibility is available to them, except a limited power to direct capital provision for their children.'

• The judge also referred to the House of Lords case of Lloyds Bank Plc v Rosset 1991 1AC 107. The court has to ask itself whether there have at any time prior to the acquisition of the disputed property, or exceptionally at some later date, been discussions between the parties leading to any agreement, arrangement or understanding reached between them that the property is to be shared beneficially ... If there have been discussions of that kind and the answer is 'yes', the court proceeds to examine the subsequent course of dealing between the parties for evidence of conduct detrimental to the party without legal title. In the case I dealt with, Mrs A did a considerable amount of work to the property undertaking improvements and paying towards an extension to the property and notwithstanding the property being in Mr A’s sole name, the Court of Appeal awarded Mrs A one half of the equity.

 

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• In Grant v Edwards. a decision of the Court of Appeal 1986 1 Ch 6.38 Mustill LJ. as he then was, said at p 651:
1. The law does not recognise a concept of family property, whereby people who live together in a settled relationship share the rights of ownership in the assets acquired and used for the purposes of their life together.'
2. The question whether one party to the relationship acquires rights to property the legal title to which is vested in the other party must be answered in terms of the existing laws of trust.
3. . . . The enquiry must proceed in two stages. First, by considering whether something happened between the parties in the nature of bargain, promise or tacit common intention, at the time of acquisition. Second, if the answer is ‘yes', by asking whether the claimant subsequently conducted herself in a manner which was
(a) detrimental to herself and (b) referable to whatever happened on acquisition.

4. . . . The event, happening or acquisition may take one of the following shapes:
(a) An express bargain whereby the proprietor promises the claimant an interest in the property, in return for an explicit undertaking by the claimant to act in a certain way. (b) An express but incomplete bargain whereby the proprietor promises the claimant an interest in the property on the basis that the claimantwill do something in reurn.’

• TLATA simplified the law so that where the legal and beneficial title is held in joint names and the co-owners cannot agree on a sale, then either party can apply under s 14 of TLATA for an order that the property be sold and the sale proceeds divided in accordance with the respective beneficial interests. If the beneficial interests are not stated in the title documents, the court can be asked to determine the respective shares. Under s 15 of TLATA the court must have regard to:
1. The intention of the person(s) (if any) who created the trust;
2. The purposes for which the property subject to the trust is held;
3. The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home; and
4. The interests of any secured creditor of any beneficiary.
The court has discretion to order a sale and will still have to consider whether the underlying purpose for which the property was bought eg cohabitation, has come to an end. The court has wider scope under s 15 than it did under s 30 of the Law of Property Act.
Where the title documents do not show one party to have an interest, then the applicant will have to prove that an interest was acquired from a resulting trust, a constructive trust or by proprietary estoppel. The court does not have a discretion as it does under s 25 of the Matrimonial Causes Act 1973. The question is whether the parties intended to share the beneficial interest.

continue to Part IV - Financial Matters Children and Death... >




 

 
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